The Croatian government today adopted a decision on measures for direct control over prices of certain products and certain categories of goods in retail trade. A new list of 70 products with limited prices has been announced - 40 more than the previous one, adopted in September 2023. The government's new measures, in the form of the Law on Emergency Measures for Price Control, will be submitted to an urgent parliamentary procedure.
Regarding the argument that high VAT is responsible for high prices, Finance Minister Marko Primorac told HRT television that despite Croatia's high VAT rate of 25 percent, one of the highest in the EU, this does not mean that it is an argument for price increases. Back in 2022 The government has reduced the VAT rate to 5 percent for a wide range of products "from farm to table", including bread, minced pork, whole uncut, chicken, fresh milk, category M eggs, sunflower oil, pork and beef neck, oranges, lemons, apples, onions and leeks, cabbage, potatoes, ripe beans, carrots, etc.
The law on emergency price control measures is due to come into force next Friday, February 7. Traders will have seven days to adjust prices and adapt to the requirements of the law. For example, each trader will have to mark with a special sign goods with a price ceiling, as well as select at least one product from a certain category of goods that will be at a limited price – For example, out of all types of spaghetti offered in the store, at least one brand must be at a limited price, and there may be more, depending on the retailer.
Consultants and representatives of business associations defend the retailers, arguing with high taxes and a huge and expensive state apparatus. According to them, the boycott could also have an adverse effect on the income of employees in the stores. The consultants and representatives of business associations also believe that the prices are not high because of the retailers' margins, Croatian Television (HRT) reports in its news.
“If it is not about the margins, then why does the same product in the same retail chain have a higher price in Croatia than in Western countries”, citizens in Zagreb commented via BTA. They want the retailers to take their protest seriously on the day of the boycott and warn that if necessary, they will pay literally for nothing – not only in stores, but also in the service sector - hairdressing, banking, postal, tourist, as well as delivery of products and food to take home.
A retail chain, not affected by the week-long boycott, announced today that it is reducing the prices of 250 items by an average of 10 percent from Saturday, February 1, until June 1. Hours later, another retail chain announced a reduction in the regular prices of more than a thousand items, which will be put on sale from February 5.